What Business are You In?

“What business are you in?” is one of those thought-provoking questions you might have encountered at a management training session. It often is part of exercises to help managers and executives reimagine the business they are in, such as the classic adage that many in the railroad business might have done better had they realized they were in the “transportation” business.

These days, with virtually all telecom industry executives focused on ways to add value and grow revenues by moving up the stack in various ways, it is fairly easy to see why some tier-one mobile operators have special interest in the connected car opportunity. First, the ecosystem is large, representing perhaps $7 trillion in annual economic activity from vehicle sales, support and service.

Also, compared to most other industry verticals, connected vehicles are going to rely primarily or exclusively on mobile network connections. In many other industrial verticals, there are other connectivity options. Simply, mobile clients require a mobile network.

Also, the “mobility business” (cars, trucks) is inefficient in a way that Uber has shown can be optimized using smartphones and mobile devices. The issue is how much more optimization can occur, and what role mobile operators can play.

Some 95 percent of cars are parked, and driving just five percent of the time, a textbook example of stranded assets, even if the stranding is momentary. So connected and autonomous vehicles could dramatically reshape the physical mobility business, with upside for the communications mobility business.

There are lots of areas expected to grow, including sensors, semiconductors, radar, cameras, LiDAR, precision mapping, artificial intelligence (AI), vehicle-compute hardware, batteries and storage, infotainment, ride-hailing and carsharing. Mobile networks will play a direct role in supporting many of those functions, and also represent a chance for at least some tier-one service providers to create new roles elsewhere in the physical mobility business.